The EU

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Tuesday, May 11, 2010

After Greece?

Here is a column by economist Robert Samuelson, "The Welfare State's Death Spiral".

The author's basic point is that Western Democracies cannot afford some of the welfare states they are operating and Greece is a prime example.  The other European (Euro) nations bailed out Greece, but who bails out the next one, and the one after that?  The lede reads:
What we're seeing in Greece is the death spiral of the welfare state. This isn't Greece's problem alone, and that's why its crisis has rattled global stock markets and threatens economic recovery. Virtually every advanced nation, including the United States, faces the same prospect. Aging populations have been promised huge health and retirement benefits, which countries haven't fully covered with taxes. The reckoning has arrived in Greece, but it awaits most wealthy societies.
The author goes on to note that here in these United States we dislike the term welfare state, so we use the term entitlements.  Same difference.

The proposed pay raise for Boston Firemen is an example of a welfare state out of control.  At some point we are going to have to say no to pay raises for people in the military Services and to civil servants, federal and local, even if they do have unions.  Even now the Department of Defense is asking Congress to hold back on generous pay raises for Service Members.  For those of you who wish to ask me about forgoing my pay raise, as a part time worker at DRC I am on the same hourly rate that I was on when I retired over a year ago—so no raise in 2.25 years.  And, there was no Social Security Cost of Living Allowance (COLA) for 2010.

Hat tip to the Instapundit

Regards  —  Cliff


Renee said...

Over at the marriage/public policy blog I contribute to, someone mentioned that Greece had a very very low birth out of wed-lock rate, at 2.9% compared to America's 40%. Sounds like a good thing, but with a total fertility replacement of 1.51, 2.1 for flat-line population. On top of that, is there over all attitude towards children and family.

Greece also has the highest abortion rate in Europe,
"More than 250,000 abortions take place every year in Greece, of which 40,000 are on underage girls younger than 16. Also, a third of them are performed on married women who would avoid them if they could afford a larger family.
This information was announced by Gynecology Professor of Aristotle University of Thessaloniki, Ioannis Bodis, speaking at the 2nd day of the 17th Northern Greece Medical Conference, organized by the Thessaloniki Medical Company.
In the 1980-1999 periods, stressed Mr. Bodis, Greece exhibited a decrease of 41% in fertility, twice as much (in percentage) as in the rest of Europe, while the US showed an increase in the fertility factor of 14%."

As Darwin Catholic states, "Because most philosophies that frown on reproduction don't survive."


Jack Mitchell said...

The issue is as much population control, as it is welfare control.

I'd like to see the Pope get with the program.

ncrossland said...

I personally think that public entitlement/welfare programs eventually become analagous to the kids putting up a lemonade stand and then selling their product to themselves...and calling it "money-making." Eventually, Americans will experience this reality, paying for programs that pay them so that they can then pay for the programs that pay them. In the flying business, we occasionally refer to this as a "graveyard spiral" in which the pilot is convinced that he/she is flying normally....everything is just fine.....right up to impact with the earth.

There probably ARE legitimate "retirement" programs that are necessary. Police, firemen, military all come to mind. If we want and expect these folks to devote their lives to that sort of service, we should be prepared to provide them a retirement program of some kind. That "kind" may be in the form of the 401k, or it may be a vested program. My sense is that we pay them a very good wage and require that they contribute in some way to a retirement fund.

The problem is that, for instance, military retirement is viewed in the same light as Social Security, or even a national welfare system of sorts.....and thus...when the politicos talk of "tightening our belts" or "spreading a little around" it all gets lumped together....and swept out the door.

The other day, on the announcement of Utah throwing Bennett out the door, a commentator lamented that it ended his "political career." Huh? "Career" suggests that getting elected to public office every so many years is a "career" that somehow begs lifetime compensation. And this is where we go wrong.

At the other end of the scale, we have the folks who are desitute. The apologists of the world want to reach out and lift these unfortunates up out of the gutter they find themselves in. But in fact, that seems to only prolong the agony by rewarding it. It is a tough love kind of thing to impose, but for many if not most, "earning a living" is its own way to salvation....whether it involves a minimum wage job washing dishes or sweeping streets....or heaven forbid....picking field crops. To be sure, those kinds of jobs don't get you a 50" plasma screen TV and a fistful of food stamps.....but you are "paying your way" and just possibly because of that, you aren't having illigitimate babies or holding up someone else.

Somehow along the line, we've nurtured this belief that nobody should live below the "poverty level." The problem is, not everyone can or should be a brain surgeon, or a banker, or an airline pilot. Somebody has to sweep the floors, fuel the planes, empty out the biohazard garbage...but we feel that because those jobs are "minimum wage" or place the job holder below the "poverty line" that we need to subsidize them.

This is exactly what has led to Greece's problems.....

What on earth did folks do when there was no welfare state to prop them up?? My suspicion is that they got hungry enough to go out and "work for food." And for the few that decided that work is for fools and chumps, that TAKING what you want is better, faster, cheaper...they bought themselves a very small and uncomfortable space in a prison...where...guess what...they were forced to work their worthless tail off 24/7 to pay for their room and board.

Well....we get what we pay for.....or not.

Renee said...

In non-governmental supported systems, people had to rely on their children. That meant an investment in children/family, but when government steps in and offers a no worry solution, well Greeks failed to recognize where their retirement was suppose to come from. Here in the U.S. wealth is determined by how much 'disposable income' you have, rather then investment in children to help out in return.

In more traditional style cultures, even the childless support children, in Samoa it can be with 'super uncles'.

"Past research has shown that the fa'afafine are much more altruistically inclined toward their nieces and nephews than either Samoan women or heterosexual men. They are willing to babysit a lot, tutor their nieces and nephews in art and music, and help out financially -- paying for medical care and education and so forth....
"To compensate for being childless, each fa'afafine would have to somehow support the survival of two additional nieces or nephews who would otherwise not have existed."

Samoa has twice the fertility rate compared to Greece, well above replacement level and apparently a traditional system of extended family to help women, who in return help elders.

ncrossland said...

Guess the world could use samoa them???????

C R Krieger said...


I am thinking that the problem in Greece is partly (and long term) about too few children, not too many.

Demography is destiny.  The French built the Maginot Line partly because they weren't breeding enough new soldiers compared to the Germans.

The Germans brought in the Turks because there were not enough Germans to keep the economy going.

Here in the US we have immigration (legal and illegal) and if we didn't, we would be slowly sliding down the demographic hill.

The world population will peak soon (but past my life span) and then there will be a lot of new economic issues to be sorted out.

Regards  —  Cliff

The New Englander said...

Just jumping in here for a sec to throw in a quick "megadittoes" about the Boston firefighter thing, and about the need to keep public sector salaries in check.

Jack Mitchell said...

Cliff, you are reinforcing the "reckless consumption" paradigm by assuming a need to maintain a bulge in the worker class.

I was, though I did not explicitly state, envisioning a sustainable lifestyle.

We will need less workers, if we turn away from buying so much useless crap.

Don't conservatives advocate "less is more?"

Renee's point about extended families should be heeded. The overexageration of "individual independence" breaks families apart. But then we are forced to fend for ourselves in a brutal world. Families will be well served to stick together.

ncrossland said...

I think that the Soviets learned the "reckless consumption" lessons very well. They didn't maintain a working class bulge, and as a result, there wasn't any crap...useless or buy in the local GUM.

AND.....the US doesn't produce all that much anyway....we have become a service economy.....importing almost everything we consume....and it worsens with each passing year....and what little we do produce....we assemble from components made elsewhere...likely China.

A cohesive family structure is a nice dream that is sadly unrealistic today. Too much of our socioeconomic requirements are anathema to the idealized extended family concept. Put another way.....the Waltons are long gone.

Some would posit that the death of the family is the death of our American society. I would modify that posit to suggest that while the original is true, the actual cause are the conditions that have caused the death of the family.

In my youth in the 40's and 50's, the anchor for family extension was the farm or a business that was passed down through generations. However, post WWII industrialization and the emergence of a suburban society supported by big government programs and influences made the family farm and many "mom and pop" style businesses unsustainable.....a slow death that continues to this day.

In my neigborhood of single family homes "serviced" by a homeowner's association, vegetable gardens or even growing vegetables is expressly and emphatically forbidden. The "official" mantra is "If you want fresh vegetables, buy them at the supermarket." AND, "guests" can reside for no more than 30 days in a home. The rationale is to prevent having more than one family living under one roof.....never mind that it is your parents...or a brother...or a sister.

Not a big thing in itself....but just little things that chisel away at the foundations of what made America Obama said in his campaign and inaugural speech...."American is the greatest society in the history of the world, and I want you to join me in changing it."

Jack Mitchell said...

Why do I always get latrine duty? I know you are an officer and all, Cliff. But you should help clean up the mess that Neal makes on your blog.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the fainthearted -- for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long, rugged path toward prosperity and freedom.
- Obama's inaugural speech

Renee said...

ncross, and that's why I still like Lowell , it's the very layout in which families can be and exist and not die out. Suburbs kill communities, and there has been some recent writing about it even from a Christian/Conservative perspective. (I'll go searching for it) If people don't have families, then they rely on government. But even government isn't really there to check up on the young and the elderly, the first line of care.

You choose to live in a development with a home owners association. It's the trade off to keep property values up and keep others out, you lose freedom.

All Lowell needs to do in build up Industrial Ave to cut down on commute time and make public transportation viable again in the city, hopefully the new judicial center can be a good anchor. Noise and people isn't a bad thing.

Jack Mitchell said...

LOL, an "arranged" community. Is there a gate?

Previous posts made the homestead sound like Fort Apache.

No "free" person would have to ask permission what color Christmas lights they can put up. Guess there are little trade offs for "ease of living."

Idioms are hard to maintain.

ncrossland said...

To set the record clearly straight.....for those of you who are so pure of heart.....our decision to purchase where we did was largely an economic necessity born out of a military salary in an extremely high cost area....and the unavailability of base housing. It was not a hunger for a gated, socialist community.

Mess wouldn't recognize a mess if you were in the middle of it. As for Cliff cleaning up the mess I make on his blog....he knows full well that all he has to say is get out.....and I will easily comply.....and you of course would smugly and snuggly enjoy that.

Go ahead Jack....make my day.

Anonymous said...

"What on earth did folks do when there was no welfare state to prop them up"
joined a union.